> For the complete documentation index, see [llms.txt](https://docs.usefarlight.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.usefarlight.com/risk/issuer.md).

# Issuer exposure on Stock Tokens

A Stock Token is a claim on Robinhood Assets (Jersey) Ltd, not the share itself. How Farlight measures that exposure, prices it into LTVs and keeps it contained.

A Stock Token and the share it tracks are different things. The token is a tokenised debt security issued by Robinhood Assets (Jersey) Ltd, referencing a share held in US custody. That gap between token and share sits inside every Farlight loan, and the protocol treats it as a distinct risk with its own controls.

## What the exposure is made of

| Component               | Description                                                                                                                                                                  |
| ----------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| Credit                  | If the issuer failed, token holders would stand as creditors with a claim on the custodied shares. Recovery could be partial, delayed, or both.                              |
| Freeze and restriction  | The issuer's terms allow it to suspend, freeze or restrict tokens in certain circumstances. Applied to collateral in escrow, that would leave the collateral untransferable. |
| Redemption              | Primary redemption is done with the issuer and requires KYC. The protocol never relies on it; it relies on prices from secondary-market auctions.                            |
| Regulatory intervention | A regulator could compel the issuer to change its terms, restrict jurisdictions or stop issuing altogether.                                                                  |

## Controls

### Priced into the tiers

A prime broker might, in principle, lend 80% or more against the share itself. Tier A tops out at 55%, and most of the distance between those two figures is issuer and liquidity risk. The tiers are set so that a large issuer haircut is absorbed before any slice is impaired.

### Bytecode review before a market opens

Published documentation shows no on-chain freeze function on Stock Tokens. That is not taken as enough. Before any market opens, the deployed bytecode of the token is inspected for pause, freeze, blacklist and forced-transfer roles, and the result is published on Telemetry, the public risk page, next to that market. Where such a role exists, the tier LTV and the exposure cap take it into account.

### Proof of reserve

Where a Chainlink Proof-of-Reserve feed or an equivalent attestation covers the issuer's custodied shares, `PriceGate` reads it and Telemetry displays it beside each Stock Token market. A market without such a feed says so plainly.

### Concentration caps

Per-token exposure caps limit the principal outstanding against any one token. Every Stock Token shares the same issuer, so Telemetry also reports the protocol's aggregate exposure to Robinhood Assets (Jersey) Ltd as a single figure. A cap on that protocol-wide issuer exposure is a candidate parameter on the roadmap.

### Isolation between markets

Markets share nothing with each other. An issuer event that hits one Stock Token, or every Stock Token, cannot reach a market collateralised by a bridged treasury token.

## What this means for a lender

Lending against Stock Tokens is lending against a claim on a regulated broker's custody arrangement, not against the share. A lender who wants the stock itself rather than a sale can set `selfLiquidate` and take the collateral in kind, but the issuer claim travels with it. The tier LTVs and caps state the protocol's view of how far that claim should be discounted. Any lender may take a stricter view by setting `maxLtvBps` lower.


---

# Agent Instructions
This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com.

## Querying This Documentation
If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question.

Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter:

```
GET https://docs.usefarlight.com/risk/issuer.md?ask=<question>&goal=<endgoal>
```

`ask` is the immediate question: it should be specific, self-contained, and written in natural language.
`goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal.

The response will contain a direct answer to the question and relevant excerpts and sources from the documentation.

Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.